Woodlands Bank fails, sold to Bank of the Ozarks by FDIC

View full size (Press-Register/John David Mercer)The Woodlands Bank branch in downtown Mobile, Ala., is seen Friday July 16, 2010. The bank, which had 3 Mobile-area branches, was shuttered this afternoon by the federal Office of Thrift Supervision and handed over to the Federal Deposit Insurance Corp.

The FDIC, in turn, sold the South Carolina-based savings bank to Bank of the Ozarks, which is headquartered in Little Rock, Ark.

No depositors will lose any money in the transaction, FDIC spokesman Greg Hernandez said. The Mobile branches downtown, at the Loop and in Tillman's Corner will open for business as usual. Depositors can continue to write checks and use ATM or debit cards. Borrowers should make loan payments as usual.

Woodlands is the successor of the former Gulf Federal Bank, a minority-owned institution that had been based in Mobile. Investors snapped it up in 2007 and moved the headquarters to Bluffton, S.C., a booming area near Hilton Head.

The bank expanded into coastal markets in Georgia and North Carolina, making a slew of real estate loans that went sour with the larger real estate market. Regulators had been tightening their vise around the savings bank for months, demanding that it raise more capital and eventually barring it from making most loans.

Woodlands had $376 million in assets and $355 million in deposits at March 31. In the Mobile and Baldwin counties it had $44 million in deposits last year, representing about 0.5 percent of the overall deposit market.

The FDIC agreed to share losses with Bank of the Ozarks on $288.7 million of the Woodlands assets. The FDIC estimated that its deposit insurance fund will lose $115 million in cleaning up bad assets.